The State Department did not know until this year that it has the authority — signed into law by President Bush in December 2008 — to deny passports to people convicted of crimes relating to the sex tourism industry, according to a Government Accountability Office report released Tuesday.

That same report revealed that 4,500 registered sex offenders, including 30 federal employees, received U.S. passports in fiscal year 2008.

GAO reported that the State Department was informed of its authority in April 2010 after congressional investigators began to study the number of sex offenders who are granted U.S. passports.

The State Department does not have the authority to deny passports to Americans based on their registry in the sex offender database.

However, the GAO report, issued to Senate Finance Committee co-chairmen Max Baucus, D-Mont., and Charles Grassley, R-Iowa, noted that the State Department can deny passports to people who “crossed an international border to commit an act based on which the individual was subsequently convicted under the federal ‘sex tourism’ statute, but only during the period the individual is imprisoned or on parole or supervised release.”

“I’m shocked that GAO had to inform the State Department that Congress made individuals convicted of sex tourism ineligible for passports back in December 2008,” Grassley said in a statement to FoxNews.com. “It’s inexcusable that the State Department did nothing to enforce that provision for 14 months.

In its investigation of 30 randomly picked individuals identified as on the Sex Offender Registry and receiving passports, the GAO found several troubling cases.

“In one case study, the sex offender was issued a passport in his name while in prison, which is allowed under federal law, while another was issued a passport after becoming delinquent in child support, an offense for which State must deny passports. Based on interviews with local police departments, several of our cases showed that sex offenders left the country and moved to Mexico,” the report reads.

The State Department lists Mexico as a sex tourism destination.

In its response, the State Department complained to GAO that the report suggests the department was lax in its enforcement. The report “appears to suggest, without any foundation, that the department’s issuance of passports to certain Americans facilitated their commission of sex offenses abroad. There are no facts in the report which show that any of the 30 individuals included in the case studies used his passport to travel to a foreign country to commit a sex crime,” it wrote.

The conclusions, forwarded by James Millette, chief financial officer at the State Department, stated that the department is interested in studying any proposed legislation to give it additional authority to deny passports to sex offenders, and that it is working with the Department of Justice to track sex tourism convictions and develop a procedure to notify the State Department.

But the department listed several other concerns about the report, including that GAO did not list the number of convictions by the Department of Justice under the relevant sex tourism statute and whether the passport could have been denied based on the conviction.

GAO responded that the law was not enacted during the time frame it studied.

The State Department also took issue with the title of the GAO report, “Passports Issued to Thousands of Registered Sex Offenders,” calling it “misleading.”

“We are concerned that it conveys more ‘shock value’ than factual accuracy,” reads the response.

“The title also fails to convey that GAO found no evidence that the offenders used their passports to commit sex offenses abroad,” the letter reads.

According to GAO, about half of the 4,500 sex offenders who received passports lived in five states — California, Texas, Florida, New York, and Michigan — and at least 12 individuals were approved landlords in the Department of Housing and Urban Development’s Section 8 housing program during the two years before the study’s time frame.

Additionally, 30 of the sex offenders who are federal employees were identified through salary data provided by the Department of the Treasury, the U.S. Postal Service and the Defense Finance and Accounting Service.

“It also is disturbing that the GAO found examples prior to that new law where the State Department issued passports to convicted sex offenders who fled law enforcement, received government housing subsidies and work for the Post Office. This report raises a lot of serious questions about how effectively the government protects us from child predators,” Grassley said.

The GAO report noted that the U.S. Postal Service recently announced its intention to start identifying any current Postal Service employees who are required by law to register as sex offenders.

The GAO acknowledged that the number of sex offenders it found receiving passports might have been low, because the data compared passport database records to the National Sex Offender Registry, which could lack or contain invalid Social Security numbers.